Strategy for the Telecommunications, Media and Technology industries

What is going to happen in TMT in 2016?

I have often found that predicting the medium to long term future is a little easier than forecasting 12 months ahead. In fact this article should probably be called – what might happen in TMT in 2016… Case in point – we are likely to see driver-less cars on our roads in the next 5 years, biotechnology that can predict illnesses and tell our doctors in the next decade and human-like AI in the next 20 years. These advances are coming and soon. But what will happen in 2016? That’s a bit trickier but i’m going to take some shots in the post.

1. This is the year Virtual Reality goes commercial

The initial commercial versions of VR will likely underwhelm because of the hype surrounding them and the price – but 2016 will see Oculus ship the Rift and games and VR apps to go along with it. Games are likely to be the most prominent use of VR in 2016 with mass appeal growing only when more natural uses of the technology become available.

2. Apple may falter in 2016

Apple is very good at designing and launching products – this is its core competency. 2015, it has been argued, was a year Apple launched ‘beta products’ as it has done so in the past only to improve on them in the following year. However, there are two issues that face Apple which I think will come to the fore in 2016. The first being Apple’s ability to make money from services associated with its devices. No product captures the tension between Apple’s product skill and service shortcomings more than the Apple Watch released last year. The Watch’s integration with Siri or other service platforms and therefore the cloud is an important factor in Apple’s ability to rival the services that Google can provide through it’s Google Now applications and improve its product proposition. This leads to the second point, technology cycles are starting to trend more toward services than devices. As connected device proliferation occurs it will be providers of services into these nodes that gain a larger share of profit (until the cycle swings back to devices…). Apple is currently getting by on the bets made between 2007-2011 – 2016 is a big year for some new strategic bets.

3. A new form of wearables will take off

2015 was certainly the year of the watch and the wrist will continue to be a source of growth for wearable tech in 2016. However i can help but think that wearables will move beyond the wrist into other parts of the body like the ears, feet, clothing or perhaps another go at eyewear. I am keenly watching the CES and MWC conferences to see this trend appear – there are already a few contenders: connected shoes, translators on your neck

4. Publishing in social media will go badly for a high profile publisher

Last year – Facebook launched instant articles, Apple launched Apple news and SnapChat took on media publishing. This model shows promise as a new way to monetise content which reaches specific audiences based on their social graph. However, I believe the upside is likely to be weighted more to the social media properties than the publisher. In 2016, we will see the initial results of this test and they may not be good for publishers.

5. HBO will go it along and rival Netflix in SVOD

2016 will be the year that HBO is spun off from its parent company to create an SVOD competitor to Netflix. Netflix revenues grew 134% last year which has made it a darling of Wall St. This also signals that there is still room for new competition in the SVOD market and HBO would make a formidable competitor particularly giving its content production talent. In other quarters – it will be interesting to see where Google takes YouTube this year after its launch of YouTube Red late 2015 – my pick is an all in one multimedia player (music, video, long form exclusive content, live stream, gaming).

6. Facebook’s next evolution – Messaging innovation

2015 was unquestionably the year of Facebook with Whatsapp and Messenger allowing the social media giant to take a greater hold of the mobile eco-system. Founded in 2004… it could be called the decade of Facebook. But what is next? Facebook has a conundrum that it will overcome in 2016 – the fundamental premise of Facebook (like Twitter, LinkedIn) has been broadcasting but this is not necessarily where the long term value lies. The work on Messenger and Whatsapp is the most critical thing happening at the company and I suspect we will see new innovations in messaging (e.g. payments, B2C service queries, Facebook App Store).

7. Amazon takes on logistics and the last mile in earnest

If the broader technology cycle is moving toward services then Amazon is well positioned as a seller (the preeminent seller?) of the infrastructure those services run. Equally, if technology is disseminating from pure software to affecting the physical world, then it is definitely good to be building the most impressive logistics network that anyone has ever seen. Moves during the 2015 Christmas period give some insight into what may be the year Amazon takes on the global logistics players – see the neatly named ‘Project Aerosmith’.

8. A virtual SIM in mass market devices

I wrote about this last year and this prediction might be a year early but I suspect we will see (perhaps at MWC) the first devices with inbuilt SIMs that are able to switch between networks. We have already seen the Apple SIM in iPads but not not the Smartphone and not with mass market take up. Iphone 7 may offer this feature and the question will be whether carriers will accept the new SIM format (they may have no choice) – what changes will we see to carrier business models?

Like in many articles that you see around this time of the year of some these predictions border on ‘the fiction side of non-fiction’ – and that is intentional. However, there is an element of truth in all of them.

Happy new year and best wishes to everyone for a healthy and happy 2016.